Business

Airlines Bring In More Money from Bag, Reservations Fees

Published

11 years ago

May 5, 2015

In this Dec. 1, 2013 file photo, travelers walk through terminal 3 baggage claim at O’Hare International airport in Chicago. The Department of Transportation on Monday, May 4, 2015 said that airline net income fell to $7.5 billion in 2014 from $12.2 billion in 2013. Airlines collected $3.5 billion in bag fees, a 5 percent increase over 2013. (AP Photo/Nam Y. Huh, File)

DAVID KOENIG, AP Airlines Writer

U.S. airlines are earning billions, and they are collecting more in fees on checked bags and reservation changes.

Whether airlines are making more or less profit than before depends on which figures you use, although the parent company of American and US Airways comes out on top either way.

The Department of Transportation said Monday that airlines collected $3.5 billion in bag fees last year, a 5 percent increase over 2013, and $3 billion in reservation-change fees, a 6 percent hike.

Fees began escalating in 2008, when airlines were losing money and facing a sharp rise in fuel prices. Today, they make up a growing share of airline revenue.

At Spirit Airlines, which touts low fares and adds lots of fees, only 63 percent of its revenue comes from fares. Southwest still lets customers check two bags or change a reservation for free; it gets 95 percent of revenue from the ticket price.

Charlie Leocha of the Consumer Travel Alliance said airlines should reduce fees, but he doesn’t expect that to happen because the fees bring in too much money. He favors a proposed federal rule that would require airlines to improve disclosure of how much fees will increase a traveler’s total bill.

Jean Medina, a spokeswoman for the industry trade group Airlines for America, said that fees let airlines charge customers for things they value while keeping base fares low. She said airlines are using “modest” profits and savings from lower fuel prices to invest in new planes and facilities and to reward employees and shareholders.

Net income at the 27 airlines counted by the government fell to $7.5 billion last year from $12.2 billion in 2013. However, net income can include one-time gains or losses, and analysts usually prefer to look at operating profit.

On that basis, the airlines did even better in 2014 than 2013 — pretax operating profit rose to $14.6 billion from $11.3 billion.

One carrier, Delta Air Lines, accounted for more than the entire industry’s decline in net income because it scored a one-time tax gain of $8 billion in 2013. That caused net income to plunge from $10.54 billion to $649 million in 2014.

But take away the 2013 tax gain and 2014 losses on fuel-hedging contracts, and Delta saw a more modest decline in pretax operating profit — $2.93 billion last year, compared with $3.84 billion in 2013.

Other than Delta, both net income and operating profit rose at all the other leading airlines — American, US Airways, which is now part of American, United and Southwest — according to government figures. Those carriers control more than 80 percent of the U.S. air-travel market.

American Air Group Inc. had the highest revenue, net income and operating profit.

___

David Koenig can be reached at http://twitter.com/airlinewriter

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Financial Wellness and Mental Health: Managing Money Stress in College 

While everyone’s financial situation is unique, several common sources of stress have the potential to strain your financial health. These include financial and economic uncertainty, existing debts, unexpected expenses, and mental or physical health changes. Financial stress may differ from situation to situation, but understanding the factors contributing to yours may help you begin to craft a plan for your unique circumstances.

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March 17, 2026

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As a college student, managing financial responsibilities can be stressful.

If you’ve found yourself staying up late thinking about your finances or just feeling anxious overall about your financial future, you’re not alone. In one survey, 78% of college students who reported financial stress had negative impacts on their mental health, and 59% considered dropping out. While finances can impact overall stress, taking steps to manage your finances can support your mental, emotional and physical well-being.

When it comes to money, the sources of stress may look different for each student, but identifying the underlying causes and setting goals accordingly may help you feel more confident about your financial future.

Consider these strategies to help improve your financial wellness and reduce stress.

Understand what causes financial stress

2. Determine your financial priorities

Start by reflecting on your financial priorities. For students this often includes paying for school or paying off student loans, studying abroad, saving for spring break, building an emergency fund, paying down credit card debt or buying a car. Name the milestones that are most important to you, and plan accordingly.

3. Create a plan and stick to it

While setting actionable goals starts you on the journey to better financial health, it’s essential to craft a plan to follow through. Identifying and committing to a savings plan may give you a greater sense of control over your finances, which may help reduce your stress. Creating and sticking to a budget allows you to better track where your money is going so you may spend less and save more.

4. Pay down debt

Many students have some form of debt and want to make progress toward reducing their debt obligations. One option is the debt avalanche method, which focuses on paying off your debt with the highest interest rate first, then moving on to the debt with the next-highest interest rate. Another is the debt snowball method, which builds momentum by paying off your smallest debt balance, and then working your way up to the largest amounts.

5. Build your financial resilience

Some financial stress may be inevitable, but building financial resilience may allow you to overcome obstacles more easily. The more you learn about managing your money, for instance, the more prepared you’ll feel if the unexpected happens. Growing your emergency savings also may increase resilience since you’ll be more financially prepared to cover unexpected expenses or pay your living expenses.

6. Seek help and support

Many colleges have resources to help students experiencing financial stress, like financial literacy courses or funds that provide some assistance for students in need. Talk to your admissions counselor or advisor about your concerns, and they can direct you to sources of support. Your school’s counseling center can also be a great resource for mental health assistance if you’re struggling with financial stress.

The bottom line

Financial stress can affect college students’ health and wellbeing, but it doesn’t have to derail your dreams. Setting smart financial goals and developing simple plans to achieve them may help ease your stress. Revisit and adjust your plan as needed to ensure it continues to work for you, and seek additional support on campus as needed to help keep you on track.

 JPMorgan Chase Bank, N.A. Member FDIC